How worker ownership builds community wealth and a more just society

A recent help-wanted ad for a laundry worker in Cleveland contained some unusual language, asking prospective candidates: “Have you ever wanted to work for a company that is 90 percent employee-owned? What about a company that offers a program to help you become a homeowner?” The ad went on to identify Evergreen Cooperative Laundry as the only employee-owned commercial laundry firm in the country, citing a commitment to building the wealth and careers of its employees.

Founded in Cleveland in 2009, Evergreen laundry lies at the heart of a movement that has now spread around the world. This attention to community wealth building is providing a 21st century model for Gandhi’s “constructive program,” which — along with nonviolent direct action — powered his overall campaign to overcome the political and economic oppression of colonialism.

The cooperative movement in the Rust Belt city of Cleveland has deep roots in community struggle for shared wealth. Its earliest origins are in the Mondragon co-op movement of the Basque Country in northern Spain, where tens of thousands of workers are organized into a vast co-op network that has flourished since the 1950s. Here in the U.S., when steel companies were closing down throughout the Ohio Valley in the 1970s — and moving to non-union, lower-wage regions in the south, and then overseas — a small band of activists promoted the idea of worker ownership.

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Gar Alperovitz, a key player in that campaign, traces its origins to the 1977 shuttering of the Youngstown Sheet and Tube steel mill, which threw 5,000 steelworkers onto the streets, with little retraining help and no other jobs available. A plan by an ecumenical religious coalition for community-worker ownership of the giant mill captured widespread media attention, significant bipartisan support and an initial $200 million in loan guarantees from the Carter administration.

According to Alperovitz, “Corporate and other political maneuvering in the end undercut the Youngstown initiative. Nonetheless, the effort had ongoing impact, especially in Ohio, where the idea of worker-ownership became widespread … because of all the publicity and the depth of policy failures in response to deindustrialization throughout the state.”

Now, nearly half a century later, the Evergreen laundry and its sister solar and greenhouse coops are at the heart of the model around which the theory and practice of community wealth building have grown. Developed by the new economy research center Democracy Collaborative, the model is a simple one: First, identify anchor institutions — hospitals, universities, seats of government — that are not going to relocate in search of higher profits and incentivize them to do their procurement of supplies and services locally, so that those dollars stay at home. Then, make regulatory, financing and policy changes that support the growth of cooperatives to supply their needs, so that the business profits stay with the workers. This model has been quietly gaining attention and putting down roots in other places — starting with a jump across the Atlantic Ocean.

Community wealth building in the UK

In 2012, it seemed like the run-down industrial city of Preston, in northern England, had come to the end of the road. Its economic base had been bleeding away for years, and the last gasp attempt — a deal to lure in a mall developer — had fallen through. Fortunately, a deep-thinking member of the Preston City Council, Matthew Brown, had heard of an innovative model of community wealth building based in Cleveland, Ohio.

“Crucially, we need to have more democracy in Preston’s economy — we can’t be at the whims of outside investors who’ll want to extract as much wealth from our community as possible,” Brown told the Lancashire Post. He reached out to Ted Howard from the Democracy Collaborative and, looking back on the last 10 years, the resulting collaboration can be seen as transformative.

Preston City Council started by working with its own anchor institutions, getting them to prioritize contracting with local companies. It began creating worker cooperatives and paying a real living wage. The city’s government pension fund is now investing locally. Plans for a community bank are in the works. Employment and affordable housing rates are up; child poverty is down.

Procurement dollars that stayed within the city have risen from $46.8 million to $138.4 million; anchor institutions are more connected to the local economy; and its residents and experience in supporting the development of new businesses and cooperatives have grown. According to Ted Howard of the Democracy Collaborative, the impact and potential of these combined efforts is “creating an ecosystem of change that will be the engine for a new, fairer economy.” 

In a stunning turnaround, Preston was named the most improved city in the U.K. in 2018, and the “Preston Model” has become a household word. The Centre for Local Economic Strategies, or CLES, which was active in Preston, is now working with dozens of local authorities, anchor institutions, and U.K. nations to develop community wealth building approaches that are appropriate to the context of their place. At the same time, it is also supporting similar efforts across Europe and as far afield as Australia and New Zealand.

Keeping small businesses alive in Denver

Back in the U.S., where similar models are spreading, Denver’s Center for Community Wealth Building, or CCWB, has just received a $360,000 economic development grant for a three-year initiative to launch six to nine new cooperatives in Denver and neighboring Aurora. Such worker cooperatives can stabilize jobs and income for those who might otherwise be displaced by gentrification, while also help to keep small businesses — the heart of these communities — alive.

CCWB Executive Director Yessica Holguin was first hired as a fellow to work on building opportunity in low-income neighborhoods. Coming from a community organizing background, her first step was to go out and talk to the community. “I wanted to understand the experience of gentrification from the perspective of the residents. And I wanted to hear what solutions resonated with them,” Holguin explained in a press release. “When people own their jobs, when they own their businesses, own their lives, the ripple effects are felt throughout the community.”

Worker co-ops clearly resonated, and she jumped in to help launch two of them — both of which remain successful today: Mujeres Emprendadores, a catering service started by immigrant women, and Satya Yoga Cooperative, a yoga school run by and for people of color.

CCWB’s three-pronged strategy is modeled on the Evergreen co-ops: democratize ownership through worker co-ops, strengthen entrepreneurial opportunities for people of color and encourage anchor institutions to become local economic engines. To help the University of Denver shift its spending on catering from national chains, for example, CCWB organized a tasting event where over a hundred university event planners met and began building relationships with 11 community caterers.

To ensure that cooperatives can flourish, CCWB has developed a roadmap to guide various city departments to support awareness, skills and access. “It’s not just potential worker-owners who need to see the benefits of cooperative businesses” Holguin said. “We want the community to understand how widespread democratic ownership will benefit everyone.”

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An economy like a little stream

This approach is proving flexible, resilient and effective. It is putting down roots and beginning to have an impact not only in Cleveland, Preston and Denver, but in an ever-growing number of cities around the world. It consistently supports both political and economic democracy, while also addressing the needs for better pay and a sharing of our common wealth.

We can use the analogy of water to think about how money moves in an economy. One model is like a storm water system, efficiently gathering water from many small sources, with the goal of consolidation and steady movement toward a central location. A very different model is like a little stream meandering through a wetland, cleansing and nourishing everything it touches — an integral part of the ecosystem, not trying to get anywhere else.

In our current economic system, money functions like the former, steadily being siphoned from the hands of individuals and communities into those of great financial interests. Community wealth building is all about the latter — circulating and recirculating money in the local economy, in no hurry, allowing its benefits to serve all.

By offering a powerful framework and lever for moving toward greater local control over wealth, community wealth building is simply another way of getting to the roots. It provides an alternative to moneyed interests being in control and their bottom line trumping the common welfare.

Reflecting on the role of the Evergreen Laundry — established in a neighborhood of Cleveland where the average income is lower than 93.4 percent of U.S. communities — Howard told The Guardian: “A job is not enough. For people to stay out of poverty they need to be able to acquire assets.” Along with a job, the co-op offers pension payments and profit sharing, and has brought the possibility of home-ownership within reach.

From a new homeowner in Cleveland, to growing connections between university staff in Colorado and local catering co-ops, to the turnaround of a struggling city in northern England and beyond, the promise of community wealth building appears boundless. Bringing together Gandhi’s strategy of nonviolent direct action to confront injustice with a constructive program of steadily diverting resources from the powers-that-be back to the people, this model offers a powerful framework for reclaiming our democracy and our economy.